From the top · 28 October 2016

Sadiq Khan unites with London retailers to fight government over business rates

Sadiq Khan
Sadiq Khan and more than 40 business bodies oppose the current business rates system.

An alliance of more than 40 business bodies and London mayor Sadiq Khan have joined forces to oppose the government’s current business rates system.

Forming a “united and unprecedented” opposition to current business rates rules, the alliance includes the Federation of Small Businesses (FSB), the London Chambers of Commerce (LCC), and the New West End Company.

In a letter to communities’ secretary Sajid Javid, Khan and his coalition called for “a fundamental review” of the business rates system, so that London’s firms are not hit by unfair costs.

The group warned government that business rate increases, which are expected to follow next April’s review of the system, would “hit London hard” and will cause an “unnecessary economic blow”.

Overall, London’s business owners face an annual business rate increase of roughly £885m, with some areas of the city rumoured to be in line for a 150 per cent rise after April 2017.

The letter calls on the government to ensure any heavier business rate burden in London be phased in over a longer period, allowing owners more of a chance to cope.

The letter’s publication comes one day after the government closed a consultation on the “transitional relief” arrangements for new business rates.

At present, proposals for the business rate revaluation will see increases in the first year capped at 45 per cent, a significant increase on the 12.5 per cent first year cap from previous revaluations.

The group is concerned that the revaluation will result in a slowing in investment, job creation and profits, at a time when business owners need confidence and stability.

London’s deputy mayor for business, Rajesh Agrawal, said in a statement: “It is unacceptable that thousands of firms in the capital are, in effect, facing 50 per cent increases in their business rate bills with barely six months’ notice.”

In total 43 organisations signed the letter, including 32 local business improvement bodies as well as pan-London bodies like the LCC and London council representatives.

In September, the chairman of the New West End Company, the body representing retailers in some of London’s busiest shopping districts including Oxford Street, Regent Street and Bond Street, Peter Rogers, said that current government proposals would be “catastrophic” for London shops.

Rogers added: “Recent developments in the government’s revaluation of business rates have called into question the very suitability of the business rates system.

“We urge the chancellor to kick-start an overhaul of the revaluation system, and seriously consider measures such as annual revaluations and the possibility of separating London from the national system to ensure our capital is protected.”

April 2017 will see the first business rates revaluation for seven years.

How to resolve common business rates issues between landlords and tenants

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ABOUT THE EXPERT

Fred Heritage is deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London. He previously worked as a reporter at Global Trade Review magazine.

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